Here is my basic opinion, loaded the chart on rem as well, on my way back from the gym and typed this up. The return numbers are correct you can use google finance if you want to verify i didn't manipulate numbers from the ticker.
Again this is my opinion, do your own work make your own call listen to who you want.
1) Inflation Protection: The united states has been acting like a printing press. What this means is that inflation will be higher than normal. Asset prices go up. Bad news. So what you do is buy assets such as homes to protect against said inflation hike. Look at BitCoins the reason why they rallied is because people are looking for a store of value hence why Gold ran up. Not making a call on bit coins of course but basically coins went up as a store of value
2) Low Credit Risk Exposure: Given the increases in credit requirements it is my view that people purchasing homes are more credit worthy. Investing in single family homes or Mortgages (Reits and or otherwise, I mentioned several in the very old thread REM and DBLTX and look at how those have done YTD and over the course of time since posting including the 10% yield). Here’s the proof the thread was started in March of 2012. http://www.rooshvforum.network/thread-10970.html
Here is REM as of march of 2012 since I posted about it you can find the date for that as well.
[attachment=12186]
21.66% return not that bad IMHO basically 20% gains in a year. ($2.15 in dividends (14% and 7.5% off appreciation because the spreads have remained favorable - for newbs all you do is all up the Dividend payments and divide by current stock price to approximate dividend returns are part of your total profile)
3)Trading at Book Value: Looking across the reit indexes, you see they trade at roughly 1.0x book value. This means in general they are cheap. They trade in the range of 0.9x to 1.2x. At 1.0x it’s a pretty good bargain. Again this is my opinion, if things trade closer to 1.2x then I would be selling some shares and waiting for a dip again. But at a 10% yield on a REIT which should normally get 6-8% its worth the risk to own.
4) Reverse DCF: As many know cash becomes less useful the further out you have it, so for example $100 today is worth more than $100 in 10 years due to reinvestment. So if rates are low that means that the spread on a portfolio is likely to remain healthy near term I expect portfolio spreads are expected to remain at healthy levels in the 1.25%–1.75% range near-term this means you’re getting your payment (yield) earlier than later. This also means you’re calculating a reverse DCF because yields should return to normalcy but for now don’t see that happening you’re making money on the current investment cycle, would get out again when we’re near 1.1 or 1.2x book and yields are closer to 8% than 10%.
5) Carefully Choose the Reit - prepayments: If you want to buy them, again have said this a hundred times, do your own research and make your own call. So one of things that is occurring is prepayment speeds. Some of these reits have very high yields like AGNC where prepayment speeds can be at 10%+ this is a risk and should be understood.
There you go TL;DR. I like single family homes/mortgage reits whatever you want to call them, talked about them just over a year ago and they are up over 20% when you include the dividend (cash in your pocket)
Do your own work, that's my opinion have at it guys.
Again this is my opinion, do your own work make your own call listen to who you want.
1) Inflation Protection: The united states has been acting like a printing press. What this means is that inflation will be higher than normal. Asset prices go up. Bad news. So what you do is buy assets such as homes to protect against said inflation hike. Look at BitCoins the reason why they rallied is because people are looking for a store of value hence why Gold ran up. Not making a call on bit coins of course but basically coins went up as a store of value
2) Low Credit Risk Exposure: Given the increases in credit requirements it is my view that people purchasing homes are more credit worthy. Investing in single family homes or Mortgages (Reits and or otherwise, I mentioned several in the very old thread REM and DBLTX and look at how those have done YTD and over the course of time since posting including the 10% yield). Here’s the proof the thread was started in March of 2012. http://www.rooshvforum.network/thread-10970.html
Here is REM as of march of 2012 since I posted about it you can find the date for that as well.
[attachment=12186]
21.66% return not that bad IMHO basically 20% gains in a year. ($2.15 in dividends (14% and 7.5% off appreciation because the spreads have remained favorable - for newbs all you do is all up the Dividend payments and divide by current stock price to approximate dividend returns are part of your total profile)
3)Trading at Book Value: Looking across the reit indexes, you see they trade at roughly 1.0x book value. This means in general they are cheap. They trade in the range of 0.9x to 1.2x. At 1.0x it’s a pretty good bargain. Again this is my opinion, if things trade closer to 1.2x then I would be selling some shares and waiting for a dip again. But at a 10% yield on a REIT which should normally get 6-8% its worth the risk to own.
4) Reverse DCF: As many know cash becomes less useful the further out you have it, so for example $100 today is worth more than $100 in 10 years due to reinvestment. So if rates are low that means that the spread on a portfolio is likely to remain healthy near term I expect portfolio spreads are expected to remain at healthy levels in the 1.25%–1.75% range near-term this means you’re getting your payment (yield) earlier than later. This also means you’re calculating a reverse DCF because yields should return to normalcy but for now don’t see that happening you’re making money on the current investment cycle, would get out again when we’re near 1.1 or 1.2x book and yields are closer to 8% than 10%.
5) Carefully Choose the Reit - prepayments: If you want to buy them, again have said this a hundred times, do your own research and make your own call. So one of things that is occurring is prepayment speeds. Some of these reits have very high yields like AGNC where prepayment speeds can be at 10%+ this is a risk and should be understood.
There you go TL;DR. I like single family homes/mortgage reits whatever you want to call them, talked about them just over a year ago and they are up over 20% when you include the dividend (cash in your pocket)
Do your own work, that's my opinion have at it guys.